Opinion
Rehearing Denied Nov. 27, 1973.
As Modified Nov. 27, 1973.
Editorial Note:
This case has been marked 'not for publication' by the court.
Page 857
L. B. Ullstrom, Denver, for creditors-appellants.
Renner & Goss, Paul D. Renner, Denver, for respondent-appellee Nat. Ins. Underwriters.
SMITH, Judge.
As a result of an airplane crash which occurred on June 26, 1970, Richard J. Van Trump, pilot of the plane, and W. H. Frazier and Richard H. Sweet, passengers in the plane, were killed. On February 24, 1971, Zada R. Frazier and the estate of William H. Frazier petitioned the district court to grant special letters of administration in the estate of Richard J. Van Trump 'for the sole purpose of accepting service of process on and arranging for any defense deemed necessary. . . .', in any subsequent action. The court entered an order appointing Donald D. Hanhardt special administrator for the limited purpose prayed for in the petition, and letters of administration were issued on February 25, 1971. On November 16, 1971, Zahava Sweet and the estate of Richard Hugh Sweet filed an unliquidated claim against the estate, the claim arising out of a proposed wrongful death action against the estate. On December 16, 1971, National Insurance Underwriters filed a motion to set aside the order of the court appointing the special administrator on the grounds that the decedent Van Trump had been a resident of Texas and that there were no known assets of the estate in Colorado. Zahava Sweet and Zada R. Frazier, and their respective estates, answered this motion by means of a motion to strike. The widows argued that their claim was a valid creditor claim under the provision of C.R.S.1963, 153--7--2, that decedent was moving his residence from Texas to Colorado and was in the process of purchasing land in Colorado, that decedent committed a tort in the State of Colorado, that decedent was an insured under a liability policy issued by National Insurance Underwriters providing coverage for claims made by passengers, and that the existence of such a policy constituted an asset of decedent's estate within Colorado.
The widows subsequently filed a petition for declaratory judgment asking that the court determine whether the policy extends coverage to the widows and their respective estates for damages resulting from the airplane crash. Without a hearing, the court issued an order vacating its original order appointing the special executor, denied the original petition for appointment, ordered the petition for declaratory judgment stricken, and discharged the special administrator.
I
The widows appeal and contend that the deceased's right of exoneration under the liability insurance policy constitutes a personal estate in Colorado sufficient to support a grant of administration. The general rule is that 'a deceased insured's potential right of exoneration under an insurance policy constitutes sufficient assets, property, or estate of the deceased to justify a grant of administration of his estate.' Annot., 67 A.L.R.2d 936. Appellants urge that we adopt this general rule.
In the present posture of this case we must assume, in the absence of any showing to the contrary, the truth of the allegations of the petition for appointment.
1965 Perm.Supp., C.R.S.1963, 153--1--3, provides that the administration of the estate of an intestate person:
'shall be had in the district or probate court of the county of the last known residence of such . . . intestate . . ., or if he had no residence in this state then in the proper court of the county wherein his personal estate or the greater part thereof may be found, but if he left no personal estate, then in the proper court of the county wherein his real estate, or the greater part thereof, is situated.'
This language has been interpreted to deny jurisdiction over an estate where the nonresident decedent did not hold real or personal property in the county of the forum. Coulter v. People, 53 Colo. 40, 123 P. 647. Hence, two issues are presented. First, is the deceased insured's potential right of exoneration 'property'--as contemplated by C.R.S.1963, 153--1--1(13). Secondly, if it is 'property', can it be said to exist within Colorado?
Most jurisdictions seem to be in agreement that the right of exoneration under an insurance policy constitutes an asset of the insured's estate. The definition of 'property' in C.R.S.1963, 153--1--1(13), is so broad that there can be little doubt but that the legislature intended that claims of a contingent nature be considered property. A cause of action arising and enforceable within the jurisdiction of the court is a property right sufficient to justify the court's appointment of an administrator. Rock Island Imp. Co. v. Davis, 195 Okla. 513, 159 P.2d 728. In re Breese's Estate, 51 Wash.2d 302, 317 P.2d 1055. Bodine v. Stinson, 85 Nev. 657, 461 P.2d 868.
The conflict in the decisions has arisen from the second question posed. See generally Annot., 67 A.L.R.2d 936. In resolving this issue it is beneficial to examine the experience of the Kansas Supreme Court. In In re Estate of Rogers, 164 Kan. 492, 190 P.2d 857, the Kansas court faced a situation where Rogers, a nonresident, and Edwards, a resident, were involved in an automobile accident. As a result of injuries sustained from the accident, Edwards died. Rogers later died of unrelated causes. The administrator of the Edwards' estate, who had filed a claim in Rogers' estate for the wrongful death of Edwards, petitioned the Kansas Probate Court for the appointment of an administrator for the estate in Kansas. Under Kansas law, unless the right of exoneration under the policy was an asset of the estate, an administrator could not properly be appointed. The Court avoided this issue by basing its decision on the following rationale:
'The mere fact a foreign insurance company which issued the policy is also authorized to transact business in Kansas does not change the situs of such asset, if it be an asset prior to the establishment of the insured's liability, from the domicile of the nonresident to the state of Kansas.'
Hence, the court determined that because the asset did not have its situs in Kansas, the Kansas court did not have jurisdiction to appoint an administrator. In re Estate of Rogers, 164 Kan. 492, 190 P.2d 857.
The Rogers case was overruled by In re Estate of Preston, 193 Kan. 145, 392 P.2d 922. The court viewed the Preston case as presenting similar issues concerning the appointment of an administrator as Rogers presented. In considering whether the right of exoneration is an asset sufficient to justify the appointment of an administrator, the court adopted the view that a mere claim or right of action arising or existing and enforceable within the jurisdiction was sufficient. In so holding, the Kansas court adopted the view most prevalent among the courts which have considered the question. See, e.g., In re Riggle's Will, 18 Misc.2d 988, 188 N.Y.S.2d 622; Robinson v. Carroll, 87 N.H. 114, 174 A. 722: and In re Breese's Estate, 51 Wash.2d 302, 317 P.2d 1055.
In the sole Colorado case involving this question, wheat v. Fidelity and Casualty Co., 128 Colo. 236, 261 P.2d 493, two nonresidents received fatal injuries from an automobile accident. The widow of one nonresident, claiming to be a creditor, petitioned the county court for the appointment of an administrator for the estate of the other nonresident who was driving the vehicle involved in the accident. Although the petition was filed more than fifteen months after the death of the party, the court appointed an administrator. Immediately thereafter, the widow filed suit against the administrator for damages accruing from the automobile accident. The administrator demanded that the insurance company defend the action. The insurance company petitioned the county court to vacate the order appointing the administrator. This petition was denied, but on review of the matter the district court quashed the appointment of the administrator and granted the motion to dismiss on the ground that the appointment of the administrator violated the one year statute of limitation applicable to creditor applications for appointment of an administrator. The Supreme Court on review, affirmed and commented that it was in agreement with In re Estate of Rogers, Supra, the Kansas case later overruled by In re Estate of Preston, Supra. This endorsement of Rogers is dictum and does not control the determination of this court in the present case.
Whether a right of exoneration under an insurance policy is property located within the forum of the Colorado Court must depend to a large degree upon the consequences of such a decision. We note first that where an insurer is authorized to do business within the state of the accident, no undue burden will befall the insurer if he is required to defend an action within the state. We also note that in many liability insurance cases the site of the accident may well provide the most convenient forum in which to resolve the issue of liability. Further, public policy promotes the creation for Colorado residents of an additional means, beyond the 'long-arm' statute provided in 1965 Perm.Supp., CR.S.1963, 37--1--26, to reach the assets of non-resident tortfeasors. Finally, permitting ancillary administration on the basis of a 'right of exoneration' will not unduly burden the orderly administration in the domicillary state. With these considerations in mind, we hold that the courts of Colorado have jurisdiction to appoint an ancillary administrator where the non-resident decedent held the right of exoneration under a liability insurance policy of an insurer doing business within the state. The lower court therefore erred in adopting a contrary rule as its basis for vacating the order appointing an administrator for the estate.
II
Appellants also contend that the court erred by striking from the record its petition for a declaratory judgment. This order was made at the same time as the order vacating the appointment of the administrator. Appellants seek the declaratory judgment as a means of determining the insurance company's liability to the deceased pilot concerning the liability claims of the deceased passengers as maintained by their widows and their estates. Since the district court has jurisdiction to appoint an administrator, that administrator may either initiate or be involved in a separate declaratory judgment action. However, the declaratory judgment action is a statutory action, C.R.S.1963, 77--1--1 et seq., and should be initiated as a separate action apart from the probate proceeding. The trial court, therefore, was correct in striking the petition for declaratory judgment as being improperly filed in the probate proceeding.
Judgment affirmed in part and reversed in part as indicated above. The cause is remanded with directions to reinstate the order of appointment based upon the allegations contained in the petition for reappointment of the administrator, and for hearing upon respondents' motion to dismiss and creditors' motion to strike.
ENOCH, J., concurs.
SILVERSTEIN, C.J., dissents.
SILVERSTEIN, Chief Judge (dissenting):
I disagree with the majority insofar as it determines that the right to exoneration under an insurance policy issued to a nonresident decedent constitutes an asset which has a situs in Colorado which warrants ancillary administration of decedent's estate in this State by one claiming to be a creditor.
In Wheat v. Fidelity and Casualty Co., 128 Colo. 236, 261 P.2d 493, our Supreme Court affirmed the trial court's finding that such a right to exoneration did not constitute property in Colorado which would justify the appointment of an ancillary fiduciary. That case has not been overruled and is still the law in Colorado. In my opinion that holding is not dictum, is sound law, and should be followed.
Further, I disagree with the reasoning of the majority enunciated in support of that ruling. I concur in the ruling on the application for declaratory judgment. For these reasons I would affirm the judgment of the trial court in its entirety.